1/3/20 Market Notes
Happy New Year to all, and the stock market, which seems to be following through on the terrific 2019 equity and fixed income rally.
The Dow Jones Industrial Average gained 330 points or 1.16% to start the new year, as
the S&P 500 rallied 0.84% to a new record high. But gains were not universal as 4 of the 11 sectors of the S&P declined significantly; with the Utilities sector leading losers with a 1.38% decline, Real Estate following closely with a 1.33% drop, and the economically sensitive Materials sector falling 1.24%. Industrials (+1.81%), and the Technology sector (+1.73%) led to the upside as the mood on Wall Street was generally upbeat in a light
Late Thursday evening (EST) U.S. retaliatory airstrikes in Bagdad killed the commander of the elite Iranian forces and several other key anti-American military figures. The events have flared up tensions in an already unstable Middle-East, causing speculation that Iran may retaliate against U.S. interests in the region. As a result, Asian and European bourses relinquished early gains and are now deep in negative territory, selling off by more than 1% across the board. U.S. premarket equity futures are also pointing to sharp losses at the open, as Dow futures are indicating a 300 point plus drop at the open.
Looking past the likely short-term overreaction to geopolitical events, market participants are likely to focus on the upcoming fourth quarter earnings season, which is expected to show a resilient consumer and U.S. economy. Moreover, there are some key economic data points coming up, including:
Monday: Markit Services PMI
Tuesday: Factory Orders, ISM Non-Manufacturing data
Wednesday: Consumer Credit
Thursday: Weekly Jobless Claims
Friday: Nonfarm payrolls, December Jobs Report
The 1879 Advisors Investment Committee
Disclosures: This market commentary is written by the 1879 Advisors Investment Committee and represents the views of 1879 Advisors. This commentary is not investment advice and should not be used as a basis to make investment decisions. Please consult with your registered investment advisor before making any investment decisions.